RESPONSIBLE INVESTMENT - ESG SERIES - Vigeo Eiris

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RESPONSIBLE INVESTMENT - ESG SERIES - Vigeo Eiris
ESG
               SERIES

RESPONSIBLE
INVESTMENT
     2017 Annual Study
Performance of Latin American Investors
RESPONSIBLE INVESTMENT - ESG SERIES - Vigeo Eiris
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or other non commercial purposes are authorised without any prior written permission from
Vigeo SAS and GOVERNART SPA provided the source is fully acknowledged. Reproduction of
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written permission of Vigeo SAS and GOVERNART SPA.

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RESPONSIBLE INVESTMENT - ESG SERIES - Vigeo Eiris
Index

4   Letter of GovernArt

5   Letter of Vigeo Eiris

6   General Direction and Authorship - Collaborating Organizations

8   Highlights

9   About ESG Series - The ESG Business Case

10 Global Context

11 SRI Strategies

12 International Initiatives

14 Local Initiatives and Regulations

16 National Regulations: Examples from the rest of the world

18 Methodology

19 Rated Investors

20 Responsible Investment: Ranking of Latin American Investor

    Performance 2017

21 Brazil Profile: Investors´ Performance

22 Peru Profile: Investors´ Performance

23 Colombia Profile: Investors´ Performance

24 Chile Profile: Investors´ Performance

25 Mexico Profile: Investors´ Performance

27 International: Best Practices in Responsible Investment

33 Initiatives and Collaborating Organizations

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RESPONSIBLE INVESTMENT - ESG SERIES - Vigeo Eiris
LETTER OF GOVERNART
In Latin America, there are important opportunities for companies and institutional
investors to converge around the theme of this study: responsible investment.

On the one hand, companies have an opportunity to disclose their environmental, social
and governance (ASG) policies, practices and processes to retain and attract investors;
on the other hand, institutional investors have an opportunity to use such information
to implement investment processes that actively consider these variables, ensuring
sustainable returns in the long term.

As I pointed out in our previous Study on Investor Relations, it is very common in Latin
America that companies are ruled by historic major shareholders, be they business families     Germán Heufemann L.
or large economic groups. Under this structure, a large percentage of the company is              Managing Partner
usually left in the hands of a controlling shareholder, leaving a percentage of the property             GovernArt
in the hands of institutional investors with characteristics of minority shareholders: they
are those who could be “looking, analyzing and evaluating” with increasing stringency the
ESG performance of the companies where they invest.

In this context, we make available to financial analysts, institutional investors, and
investor relations and corporate sustainability teams the main results of our evaluation of
47 Latin American institutional investors who were rated on their responsible investment
practices in 2016.

This study attempts to put into perspective how responsible investment is conducted in
Latin America by institutional investors of Brazil, Chile, Colombia, Mexico and Peru. To
do this, we carry out an exhaustive analysis focused on the main challenges facing these
investors in the region:

Commitment to Responsible Investment: We reviewed the existence, exhaustiveness and
details of the structure of institutional investors responsible for the implementation of a
sustainable and responsible investment policy.

Implementation of Responsible Investment: We analyzed the practices and strategies of
responsible investment that have been concretely implemented by institutional investors
in Latin America, that is, at the operational level.

Results of the Responsible Investment: we verified the existence of quantitative elements
that allow to evaluate the effectiveness of the measures of responsible investment
implemented by the institutional investors of the region.

This document, which we have called “Annual Survey of Responsible Investment 2017”,
constitutes a pioneering research on this type of investment, as it provides innovative
information on practices in the region, as well as examples and relevant cases in this
regard.

I invite you to read this Study, to learn what the investment institutions of Brazil, Chile,
Colombia, Mexico and Peru are doing, and especially to identify the leaders in terms of
responsible investment practices in Latin America.

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RESPONSIBLE INVESTMENT - ESG SERIES - Vigeo Eiris
LETTER OF VIGEO EIRIS
                                  ‘I hope that one day, if you ask a firm who its responsible investing officer is, every
                                  single investment professional will say “I am” or “we are”’, said Christopher Ailman,
                                  Chief Investment Officer at CalSTRS, second largest public pension fund in the USA,
                                  at the UN PRI Global SRI Conference held in Singapore last year.

                                  For international investors, responsible investment is already becoming mainstream
                                  and will soon be the only option in terms of investment strategy. Evaluating the
                                  Environmental, Social and Governance (ESG) performances of organizations and
                                  projects in which they invest simply means that they conduct a comprehensive risk
                                  assessment, which embeds the new challenges companies are facing nowadays,
 Fanny Tora
 Head of South American Markets   such as climate change. In that sense and in order to enhance even more companies’
 Vigeo Eiris                      transparency on such matters, the Task Force on Climate-Related Financial Disclosures
                                  (TCFD), founded and chaired by Michael Bloomberg, has been set up by the G20 in
                                  June 2017, with the purpose of developing a voluntary framework for companies
                                  to disclose the financial impact of climate-related risks and opportunities. This task
                                  force is currently supported by more than 100 companies representing USD 11 trillion
                                  of assets, and shows how involved the international community is as regards such
                                  issues.
                                  Latin-American companies are not exempt from new risks. The changes occurring
                                  in their shareholding structure lead them to adjust their Corporate Governance
                                  framework. These companies operating in developing countries means they face
                                  specific social risks and responsibilities. Their use of natural resources and the
                                  resulting environmental impacts of their operations lead them to tackle local and
                                  global environmental challenges.

                                  As a consequence, Latin-American investors, who are supporting these companies
                                  in their development, cannot ignore these ESG risks and need to assess companies’
                                  ability to manage them and turning them into opportunities of sustainable business,
                                  growth and financial performance.

                                  There are as many responsible investment strategies as investors. The way to achieve
                                  it may change, but not the objectives: it’s all about ensuring long term growth and
                                  mitigating risks.

                                  In this transition towards the integration of ESG aspects in investment decision-
                                  making, Latin-American investors can make the best of the past experience of
                                  European and North American investors, as long as they adapt the lessons learned to
                                  the specific challenges of the Region. Simultaneously, regulators may also support
                                  and foster this development, by building on the past experience of regulators from
                                  other countries, but keeping in mind the local market particularities.

                                  In this second study of the ESG Series, we highlight Latin-American investors’
                                  practices when it comes to integrating ESG factors in their strategies, processes,
                                  and investment decision making. This study aims to serve as a baseline for future
                                  comparisons and updates so as to identify progress and trends in responsible
                                  investment in Latin-America.

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RESPONSIBLE INVESTMENT - ESG SERIES - Vigeo Eiris
COLLABORATING ORGANIZATIONS
      GENERAL DIRECTION
      AND AUTHORSHIP
                                                            GovernArt
                                                            GovernArt provides ESG services to companies and investors in
                                                            Latin America. Our relationship service provides comprehensive ESG
                                                            consulting, ratings, financial and ESG communications, and executive
                                                            training solutions, together with industry expertise and a history of
                                                            innovation.

                                                            Vigeo Eiris
                                                            Vigeo Eiris is a global provider of environmental, social and governance
      Céline Bonnenfant                                     (ESG) research to investors and public and private corporates. Vigeo
      ESG Analyst                                           Eiris methodologies and rating services adhere to the strictest quality
      Vigeo Eiris
                                                            standards and have been certified to the independent ARISTA® standard.
      www.vigeo-eiris.com
                                                            Vigeo Eiris is present in Paris, London, Boston, Brussels, Casablanca,
                                                            Milan, Montreal, Santiago and Tokyo and has a team of 200. The agency
                                                            works with partners through its “Vigeo Eiris Global Network” in every
                                                            continent.

      With the contribution of:

      Annabel Bol, ESG Analyst
      Gabriela Calderón, ESG Analyst
      Antonia Latapiat, ESG Analyst
      Maximiliano León, ESG Analyst
      Francisco Subiabre, ESG Analyst

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RESPONSIBLE INVESTMENT - ESG SERIES - Vigeo Eiris
RESPONSIBLE
INVESTMENT
 ANALYSIS

          ESG Series: Responsible Investment: 2017 Annual Study | 7
RESPONSIBLE INVESTMENT - ESG SERIES - Vigeo Eiris
RESPONSIBLE INVESTMENT

HIGHLIGHTS                                                      ESG
                                                                SERIES
                                                                           2017 Annual Study
                                                                           Performance of Latin American Companies

                                                      AVERAGE SCORE PER COUNTRY (0-100)

INVESTOR’S TOP 5 IN LATIN AMERICA                                                  NUMBER OF INVESTORS
                                                                                  PER PERFORMANCE RANGE

                                                                                       OF THE 47 INVESTORS…

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RESPONSIBLE INVESTMENT - ESG SERIES - Vigeo Eiris
ABOUT ESG SERIES
Vigeo Eiris and Governart have been promoting ESG integration by
investors and companies in Latin America for more than 3 years.
Thanks to several initiatives led together, like the ALAS20 one, and
to the development of ESG ratings in Latin America, we count today
with count with a broad database of ESG ratings of companies and
investors from this region.

For the first time, in partnership with the Adolfo Ibáñez University, we
make publicly available the results of these ratings through the ESG
Series. These studies aim to highlight the main strategies, practices,
and trends observed in companies and investors from Brazil, Mexico,
Colombia, Chile and Peru, when it comes to integrate ESG aspects in
their investment and management strategies.

Topics addressed through the ESG Series are: Investor Relations,
Corporate Governance, Responsible Investment, and Environmental,
Social and Governance (ESG) performance.

THE ESG BUSINESS CASE

The integration of ESG (Environmental, Social, and Governance) factors
in investment and savings decisions all continue to grow, as they are
critical issues to be taken into account in investors and companies’
strategies, to ensure long term sustainable growth and mitigate risks.
The influence of ESG criteria on the security and valuation of investments
is no longer arguable. Integration procedures vary, but all are part of
a broader approach towards risk management and sustainable value
creation. Taking them into account is to welcome opportunity and
innovation, while ignoring them poses major risks.

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RESPONSIBLE INVESTMENT - ESG SERIES - Vigeo Eiris
GLOBAL CONTEXT
 The origins of Sustainable and Responsible Investing (SRI) date back to many years before modern times, and seem to result from
 religious considerations. It was by seeking to accommodate ethical values, religious beliefs and investment targets that extra-
 financial criteria have been included into investment decisions for the very first time. These extra-financial considerations have
 been mainly related to exclusions of investments supporting armament, alcohol, pornography, tobacco, slavery, among others. In
 more recent years, the concept of ethical investment has evolved to refer to an approach that explicitly integrates environmental,
 social and governance (ESG) factors into financial analysis. It has transformed the more traditional investment decision-making
 process into a more rigorous and comprehensive one that considers the impact of an investment on all stakeholders, linking it to the
 related risks and opportunities in terms of performance. In this process, investors assess the performance of investee companies in
 addressing their ESG issues, with the underlying assumption that the better ESG risks are mitigated by companies, the better their
 performance- financial as well as other- on the long-term.

 According to the 2016 Global Sustainable Investment Review1, there are now USD 22.9 trillion of assets being professionally
 managed under responsible investment strategies, representing 26.3% of total managed assets worldwide, and an increase by 25%
 since 2014. The various actors in the investment value chain, including asset owners, asset managers and companies, have been
 continuously increasing their level of reporting as regards their ESG and sustainability strategy, considering ESG factors into both
 processes of portfolio selection and portfolio management.

 Globally, Europe has been and is still the most advanced region in terms of SRI as it accounted for 53% of total SRI assets worldwide
 in 2016. Furthermore, the share that SRI assets represented on the total European assets under management reached 52.6% the
 same year, closely followed by Australia/New Zealand (50.6%) and Canada (37.8%). In the United States, the total managed assets
 following SRI strategies represented only 21.6%, but has also been continuously rising in the last years. Japan, with 3.4% of SRI assets
 for its total managed assets in 2016, has been the fastest growing region over the 2-year period. This growth is to be explained by
 a better and greater reporting from Japanese asset managers and asset owners regarding their sustainable investment activities.

 In the case of Latin America, investors, with the exception of Brazilian ones, are still in the early stages of developing SRI investment
 activities. Despite the recent official creation of the Latin American Sustainable Investment Forum (LatinSIF) that took place in 2016
 and which goal is to promote SRI investing in the region, local investors appear to still focus on a more traditional and shorter-term
 approach to investment, as the study will show.

 Nevertheless, with many of Latin American investors wanting to compete at the same level as financial institutions from other parts
 of the world, they will have to get on the train of responsible investment and start considering ESG factors in a more systematic
 manner. The increasing number of international norms and guidelines on the topic and the continued growth of the SRI market will
 make it a necessity. Most of the G20 countries, who have already implemented their own national regulation or guidelines on ESG
 reporting and investment to foster the evolution of their financial market, have well understood it.

 1 2016 Global Sustainable Investment Review – published in March 2017

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SRI STRATEGIES
When considering Sustainable and Responsible Investment, asset managers and corporate
investors aim to identify companies that have more advanced management practices or
represent lower risk to investors and shareholders. Sustainable and Responsible Investment
embraces the activities and strategies listed below. Investors, when building their own
responsible investment strategy, very often take one or more of these strategies to mix them
together.

1.   One of the most common responsible investment strategy is to exclude companies
     or issuers of financial instruments from a portfolio based on ESG criteria or due to
     their involvement in some specific controversial activities, also called negative or
     exclusionary screening. Historically, the most common areas of exclusion have been
     non-conventional weapons, armaments in general, tobacco and pornography while the
     exclusion criteria with an environmental focus have been nuclear power and carbon.

2.   The screening of investments against minimum standards of business practice based
     on international norms, commonly called Norms-based screening, is a strategy
     that can also be considered as a subcategory of negative screening, as it refers to
     the exclusion of companies that are considered to have violated internationally
     accepted norms. These norms are set out in international initiatives and guidelines
     such as the OECD Guidelines for Multinational Enterprises, the ILO Tripartite
     Declaration of Principles concerning Multinational Enterprises and Social Policy,
     the UN Global Compact and are to ensure a certain behaviour from companies.

3.   The Positive/best-in-class screening, as the name implies, consists of investing
     in sectors, companies or projects that are selected for their positive ESG
     performances when compared to their industry peers. It also entails not to
     invest in companies that do not meet certain ESG performance thresholds.

4.   The integration of ESG factors is a strategy that consists in integrating ESG risk and
     opportunity considerations into the investment decision making process. Investors
     seek companies that are mitigating risks due to exposure to ESG factors and that are
     dealing with externalities in order to produce higher sustainable long-term returns.

5.   Sustainability themed investing refers to the investment in sustainability-related
     themes or assets. The most common approach would be to invest either in companies
     that sell products with positive impacts such as clean energy, green technology, or in
     companies belonging to specific business areas, such as environmental technology.

6.   Impact/community investing is the fastest growing responsible investment strategy.
     It consists of targeting investments, typically made in private markets, that aim at
     solving social or environmental problems. It also includes community investing where
     capital is specifically directed to traditionally underserved individuals or communities,
     and investments made to participate to the accomplishement of the United Nation
     Sustainable Development Goals (SDGs). Green bonds would be an example of impact
     investing where the capital raised is dedicated for projects that benefit the environment.

7.   Finally, the corporate engagement and shareholder action, already a rather popular
     strategy, consists of investors exercising their rights as part-owners of the company in
     order to attempt to influence its corporate behaviour on ESG strategies and practices,
     through shareholder advocacy, rather than passively following the activities of the
     companies they invest in.

It is worth mentioning that significant differences exist at regional levels and that the SRI
strategies chosen by investors also depend of local legislations, the institutional model, and
the cultural context and level of development of the geographical area.

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INTERNATIONAL INITIATIVES
In recent years, the international landscape has evolved following the impulse of the investor community and financial industry to come together
with international organizations such as the United Nations in order to create initiatives, sets of principles, awareness raising actions that
encourage the adoption of new Sustainable and Responsible Investment practices.

Principles for Responsible Investment (PRI)

The UN-supported Principles for Responsible Investment (PRI) is a joint initiative of the UN Environment Programme - Finance Initiative and the
UN Global Compact, launched in 2006 and that has a network of international investors. The initiative’s aim is the incorporation of environmental,
social and governance (ESG) issues into mainstream investment decision-making and ownership practices, based on the premise that ESG factors
can affect the performance of investment portfolios.

The PRI provides a voluntary framework by which all investors can incorporate ESG issues into their operations and decision-making processes.
The actions that should be implemented by investors in order to incorporate ESG issues into their investing activities take the form of the
following six principles.

1.    Incorporate ESG issues into investment analysis and decision-making processes
2.    Be active owners and incorporate ESG issues into ownership policies and practices
3.    Seek Appropriate disclosure on ESG issues by the entities in which they invest
4.    Promote acceptance and implementation of the Principles within the investment industry
5.    Work together to enhance their effectiveness in implementing the Principles
6.    Report on their activities and progress towards implementing the Principles

In August 2017, there were over 1,700 investment institutions signatories of the PRI, with approximately USD 70 trillion assets under management.

The United Nations Environment Programme – Finance Initiative (UNEP FI)

The United Nations Environment Programme – Finance Initiative (UNEP FI), launched in 1992 in the context of the Earth Summit of that year, is a
partnership between United Nations Environment Programme and the global financial sector. Financial institutions, including banks, insurers and
investors, work with UNEP to understand environmental challenges and how the financial world can contribute to address them.

UNEP FI’s purpose is also to foment country-level dialogues between finance practitioners, supervisors, regulators and policy-makers, and to
promote, at international level, the financial sector’s involvement in processes such as the global climate negotiations.

In January 2017, UNEP FI launched the Principles for Positive Impact Finance, together with 19 banks and investors totalling USD 6.6 trillion in assets.
The Principles provide guidance for financiers and investors to analyse, monitor and disclose the social, environmental and economic impacts of
the financial products and services they deliver. It constitutes a direct response to the challenge of financing the Sustainable Development Goals
(SDGs).

When financial institutions become members of the UNEP FI, they are asked to adhere to a statement in which they openly recognize the role of
the financial services sector in making the economy and lifestyles sustainable and in which they also commit to the integration of environmental
and social considerations into all aspects of their operations.

In 2016, the UNEP FI reported in having a total of 213 members representing USD 62 trillion in assets under management.

The Equator principles (EPs)

The Equator Principles (EPs) provide a framework for banks and financial institutions to assess and manage the social and environmental impacts
of large projects they wish to finance. The risk management framework ensures that these projects are developed and operated in accordance
with good international environmental and social standards. The EPs also intend to provide a minimum standard for due diligence to support
responsible risk decision-making.

The EPs framework traditionally sets social and environmental standards for projects. Furthermore, over recent years, a focus has been made

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to reinforce the social standards for indigenous people and working conditions, as well as standards on community management, with a specific
principle asking for consultation with locally affected communities within the Project Finance market.
It is reported that over 90 financial institutions have adopted the Equator Principles.

The Sustainable Investment Forums (SIF) and the Global Sustainable Investment Alliance (GSIA)

Sustainable Investment Forums (SIFs) are regional or national networks that have emerged to promote responsible investment and advocate the
integration of ESG issues in the financial industry. The most important SIFs are in the United States (US Sif) and in Europe (Eurosif), while the most
recent one, the Latin SIF, doing the promotion of SRI on the South American continent, has been officially created in 2016. The main activities of
these networks are: public policy, market research and creation of platforms for nurturing sustainable investing best practices.

The Global Sustainable Investment Alliance (GSIA) is the alliance of the largest SIFs around the world, and currently has 5 members: the Eurosif,
the UK SIF, the US SIF, VBDO (Dutch Association of Investors for Sustainable Development), and the Responsible Investment Association from
Canada. Since 2012, the GSIA collects market figures and trends from its 5 members, and releases every two year a Global Sustainable Investment
Review, to provide the market with a global overview of the sustainable and responsible investment market.

The Sustainable Stock Exchange Initiative (SSE)

The Sustainable Stock Exchanges (SSE) initiative was launched in 2009 by the United Nations: It came as a response to a call for action from
investors that exchanges should contribute to the promotion of ESG disclosure from companies by including such matters in listing rules. The
SSE initiative serves as a platform for dialogue for exchanges, so they could work together with investors, regulators, and companies, to enhance
corporate sustainability and encourage responsible long-term approaches to investment. In that sense, exchanges being members of the
initiative are asked to take several actions aimed at investors such as: offering trainings to facilitate education, communication and engagement
on sustainability issues that target companies, investors, exchanges, regulators and others; encouraging the creation of financial products that
promote ESG issues, such as sustainability indices; etc.

As of 2016, the list of Partner Exchanges includes Stock Exchanges from all over the world. More specifically in South America, partner exchanges
include: Argentina (Bolsa de Comercio de Buenos Aires), Brazil (B3), Chile (Bolsa de Comercio de Santiago), Colombia (Bolsa de Valores de Colombia),
Mexico (Bolsa Mexicana de Valores) and Peru (Bolsa de Valores de Lima).

The Climate Bonds Initiative (CBI)

The Climate Bonds Initiative (CBI) is an international organization working to promote investment in projects and assets that would contribute to
the shift to a low-carbon and climate resilient economy. The strategy of the initiative is to develop a “Green and Climate Bonds market that will
help drive down the cost of capital for climate projects in developed and emerging markets; to grow aggregation mechanisms for fragmented
sectors; and to support governments seeking to tap debt capital markets”2. The objective of the initiative is to mobilize the bond market in order
for this capital to finance climate change solutions.

The CBI operates through three channels: market tracking and demonstration projects, development of standards and certification scheme,
development of policy proposal.

The Green Bond Principles (GBP) from the International Capital Market Association (ICMA)

The Green Bond Principles (GBP) are voluntary guidelines elaborated by key market participants under the coordination of the International
Capital Markets Association (ICMA) acting as secretariat to promote integrity in the Green Bond market. The GBP aim to support issuers in
transitioning their business model towards greater environmental sustainability through specific projects.

These guidelines were last updated in June 2017 and recommend transparency, disclosure and reporting. They have four core components: use of
proceeds, process for project evaluation and selection, management of proceeds and lastly, reporting.

2 Climate Bonds Initiative website –accessed in August 2017 - www.climatebonds.net/about

                                                                                                     ESG Series: Responsible Investment: 2017 Annual Study | 13
LOCAL INITIATIVES AND REGULATIONS
 At regional level, Brazil is the only country, among the five under review, where the local regulators have started to somewhat challenge pension
 funds on how ESG aspects are integrated into their core investment decision process. Nonetheless, the stock exchanges part of the Mercado
 Integrado Latinoamericano (MILA), namely the exchanges from Chile, Peru, Mexico and Colombia, have announced in February 2017 that they
 came to an agreement with S&P Dow Jones Indices, the IFC, and RobecoSAM to develop a new ESG index for the region. This represents the first
 initiative of that kind taken at the Latin American regional level.

 Brazil

 - The Brazilian National Monetary Council (CMN), issued the Resolution 3.792/20093, which requires pension funds to employ social and
 environmental criteria into their investment policy. The CMN is in charge of formulating monetary and credit policies and of ensuring the stability
 of the Brazilian currency. It is composed of the Minister of Finance, the Minister of Planning, Development and Management and the Governor of
 the Central Bank of Brazil.

 - In addition, the AMEC45 - the Brazilian Association of Capital Market Investors - aims to develop a stewardship culture in Brazil and create
 responsible engagement standards. Launched in 2016, the AMEC Stewardship Code calls on institutional investors to meet seven principles, one
 of them being the inclusion of environmental, social and governance factors in their investment processes. Although mandatory, the goal of the
 AMEC Code is not to provide a set of rules, but rather to help institutional investors create an internal policy of responsible investment.

 - B3, the Brazilian stock exchange, is a partner of the Sustainable Stock Exchange Initiative, has a couple of Exchange Traded Funds (ETFs) that
 focus on sustainability and launched a series of sustainability Indexes, including:

 •       Special Corporate Governance Stock Index(IGCX), released in 2001
 •       Corporate Sustainability Index (ISE), released in 2005.
 •       Special Tag-Along Stock Index (ITAG), released in 2005
 •       Carbon Efficient Index (ICO2), released in 2010
 •       Corporate Governance Trade Index (IGCT) released in 2011
 •       Novo Mercado Corporate Governance Equity Index (IGC-NM), released in 2012

 Chile

 - The Santiago Stock Exchange (Bolsa de Comercio de Santiago) is a partner of the Sustainable Stock Exchange Initiative.

 - It released a Guide to Responsible Investment in collaboration with EY in 20176. This document has the objective to serve as a source of
 information regarding responsible investment for the public and as a guide for institutional investors, financial and investment analysts
 regarding the incorporation of ESG issues in the investment process. The Guide has four specific objectives, if met, can help investors integrate
 ESG factors in the investment decision making process:

 1.      Understand Responsible Investment
 2.      Identify ESG risks and opportunities
 3.      Determine strategies and steps to invest responsibly
 4.      Explore the potential of responsible investment

 - In 2015, the Santiago Exchange created the Dow Jones Sustainability Chile Index (DJSI Chile), which is composed of 21 Chilean sustainability
 leaders, based on RobecoSam sustainability assessment.

     3 “The Brazilian Financial System and the Green Economy” p. 34/35 – Center for Sustainability studies at Getulio Vargas Foundation – published in September 2014
     4 UN PRI website – accessed in July 2017 – www.unpri.org
     5 AMEC website – accessed in July 2017 - w ww.amecbrasil.org.br
     6 “Guía de Inversión Responsable” – published by the Santiago Stock Exchange with EY in May 2017

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Colombia

- The “Green Protocol” (Protocolo Verde) was signed in 20127 by the Colombian President of that time and the Chairman of Asobancaria (trade
association of the financial sector), with the aim to promote sustainable development. The financial sector being a key actor in this agreement, one
of the strategies that is to be undertaken concerns the integration of the environmental and social impacts and costs in the analysis of projects
in need of funding. It asks financial institutions to develop and design green products and services taking ESG factors into account. Moreover,
guidelines for financial institutions have been developed to help these institutions reduce their ESG impacts8.

- The Colombian Security Exchange (Bolsa de Valores de Colombia - BVC) is a partner of the Sustainable Stock Exchange Initiative.

Mexico

- In 2011, the Mexican pension funds regulator CONSAR published new investment rules for pension funds, which included recommendations to
analyse and to disclose companies’ social responsibility certifications. Literally the rule 2.6 states: ’To reveal whether the administrator is certified
as a Socially Responsible Company.’

- The Mexican Exchange (Bolsa Mexicana de Valores - BMV) is a member of the Sustainable Stock Exchange Initiative and has created the ISRS
Sustainability Index in December 2011, in order to encourage the incorporation of sustainable programmes and socially responsible practices
of the listed Mexican companies. This index, according to the BMV, only considers companies with global recognition in terms of sustainability.
Furthermore, on 31 May 2017, the BMV gathered 57 institutional investors representing around USD 214 billion in assets to sign a statement in
favour of financing green bonds in Mexico9.

- Other BMV initiatives in sustainability matters include among others training and workshops for pensions funds about the benefits of joining PRI
and workshops with the IDB (Inter American Development Bank) on carbon projects and funding assessment.

Peru

- The Programme for Responsible Investment (Programa de Inversión Responsable - PIR) was launched in 2014 during the COP2010, as a joint
initiative between the private finance sector, the Lima stock exchange and the Peruvian state-owned development bank COFIDE. It aims at
promoting responsible and sustainable investment and acts as a platform coordinating the activities of the financial actors in the country. The PIR
is a signatory of the PRI from the UN, and as such, has based its own advocacy practices on the six core principles of action of the PRI.

- Since 2014, the Lima Stock Exchange (Bolsa de Valores de Lima - BVL) is a member of the Sustainable Stock Exchange Initiative. In 2008, BVL
created the Good Corporate Index (IBGC).

7 “Protocolo Verde” – published by Colombian Government and AsoBancario in June 2012
8 Asobancaria website – accessed in July 2017 - www.asobancaria.com/protocolo-verde/
9 “Declaración mundial de inversionistas sobre cambio climático.” – published by Institutional Investors Group on Climate Change in September 2014
10 PIR website – accessed in July 2017 – pir.pe

                                                                                                                            ESG Series: Responsible Investment: 2017 Annual Study | 15
NATIONAL REGULATIONS: EXAMPLES FROM THE REST OF THE WORLD
 The UN PRI, in a study that was released in 2016, stated that a strong correlation could be seen, at country level, between responsible investment-
 related public policies and better ESG risk management by companies. In the same manner, it is also said that impactful regulations can drive
 real change in how investors perceive ESG issues and integrate them in their investment-decision making process. Although investors are still
 showing scepticism towards the effectiveness of such policies, the following examples highlight what can be done at country-level to change their
 perception of the value of sustainability and ESG, and drive to long-term changes in asset management and investing activities.

 Canada

 In Ontario, Canada, pension funds are required by law, according to the pension Benefits Act, to report ‘whether environmental, social and
 governance (ESG) factors are incorporated into the plan’s investment policies and procedures and, if so, how those factors are incorporated’. This
 requirement of Regulation 909 under the Pension benefits Act (PBA) was issued in January, 2016. The Financial Services Commission of Ontario
 provides background information and guidelines on ESG factors to assist the funds in meeting this requirement. The regulation is not prescriptive
 but it requires a disclosure of ESG investments.11 12

 France

 Article 173-VI of France’s Energy Transitions law, which became effective in January 2016, legally requires asset management companies and
 institutional investors in France to report on ESG integration into their investment policies. Aside from environmental, social and governance
 issues, the reporting must provide information on how their policies align with the national strategy for energy and ecological transition, and
 include the carbon footprint of their portfolios. The information must be included in the investor’s annual report and on its website. First reporting
 must be published during 2017, or investors must explain why they do not comply with these requirements.13 14

 South Africa

 Circular 130, issued in 2007 by the South African Financial Services Board, which is the government of South Africa financial regulatory agency,
 provides guidance on good governance of pension funds by means of 13 principles. It recommends pension funds in South Africa to include
 responsible investment policies and suggests that risk management should not be limited solely to financial aspects.
 The revised Regulation 28 of the Pension Fund Act, issued by the South African Government became effective in 2011. The regulation states that
 funds should address all factors (including ESG) that may affect an investment on the long term. Launched in the same year, CRISA – the Code for
 Responsible Investing in South Africa – aims to encourage and guide the investor community to implement these ESG components, as well as the
 components of other voluntary codes of conduct (UN-PRI and JSE integrated reporting amongst others). In addition, it applies the principles for
 governance structures and sustainable operations of the King Report on Corporate Governance South Africa (King III). Since 2016, the most recent
 iteration of the King Code (4th iteration) particularly emphasizes that institutional investors, like retirement funds, should establish a strategy of
 active shareholding. 15 16 17

 11 Pension Benefits Act 1990 Regulation 909, available on Ontario Government website – accessed in July 2017 - www.ontario.ca
 12 “Investment Guidance Note IGN-004 on Environmental, Social and Governance (ESG) Factors” – published by the Superintendent of Financial Services in October 2015
 13 “Article 173-VI: Understanding the French regulation on investor climate reporting” – published by FIR in October 2016
 14 “French Energy Transition law, global investor briefing” - published by UN PRI in May 2016
 15 “Circular 130” – published by the Financial Services Board in June 2007
 16 “ Explanatory Memorandum On The Draft Regulation 28 That Gives Effect To Section 36(1)(Bb) Of The Pension Funds Act 1956, 2010” – published by South African National Treasury in 2010
 17 “King report on Governance for South Africa 2009” – published by the Institute of Directors Southern Africa in 2009

16 | ESG Series: Responsible Investment: 2017 Annual Study
South Korea

South Korea is paving the way towards a national stewardship code, seeking to increase transparent corporate management. In December 2016,
the Financial Services Commission (FSC), South Korean government’s top financial regulator, introduced a first version of the Korean Stewardship
Code. It consists of a private voluntary agreement for institutional investors, including a set of guidelines for more responsible investment
practices. The National Pension Service, the nation’s largest institutional investor, is in the review stage in order to assess whether to adopt this
agreement.18 19

The United States of America

In 2015, lawmakers in California passed a bill that prohibits the boards of the Public Employees’ Retirement System (CalPERS) and the State
Teachers’ Retirement System (CalSTRS) from ‘making new investments or renewing existing investments of public employee retirement funds in
a thermal coal company.’ This divestment in thermal coal should be completed before the year 2018.
Existing law further requires the pension funds to divest their assets in companies with active business operations in Sudan and with investments
in the energy sector of Iran, including companies that provide oil or liquefied natural gas tankers, or products used to construct or maintain
pipelines used to transport oil or liquefied natural gas.20

18 “All you need to know about Korea’s Stewardship Code” – the Investor – 06/19/2017
19 “Financial Services Commission Concentrating on Stewardship Code” – Business Korea – 08/08/2017
20 “Senate Bill No. 185, Ch. 605 - Public retirement systems: public divestiture of thermal coal companies.” – filed by California Secretary of State in October 2015

                                                                                                                                 ESG Series: Responsible Investment: 2017 Annual Study | 17
METHODOLOGY
 This study aims to assess the extent to which investors take               •    Results: the quantitative elements that may provide some
 environmental, social and governance factors into account in                    insights as regards the efficient implementation by the institution
 their investment decision making. The comprehensiveness of                      of its responsible investment policy.
 their reporting on this matter is also analysed as well as the level
 of disclosure of the rationale behind their responsible investment         Leadership:
 strategy.                                                                  This section consists of an assessment of the investment policy
                                                                            as designed and published by the investor. More specifically, the
 The performances of 47 investors in five countries were assessed           emphasis is made on whether the policy details explicitly the
 and all of these investors had been nominated through the ALAS20           different environmental, social and governance factors taken
 initiative 2016:                                                           into consideration throughout the investment decision-making
                                                                            process, and the potential quantitative targets set to reinforce this
 •    8 institutions in Brazil;                                             commitment. The level of visibility of the policy, as well as whether
 •    12 institutions in Chile;                                             there is a clear identification of the structure in charge of the policy’s
 •    13 institutions in Colombia;                                          implementation, are also assessed.
 •    6 institutions in Mexico;
 •    8 institutions in Peru.                                               Implementation:
                                                                            The second angle focuses on the different responsible investment
 The review of the investor performance is done in two steps:               strategies being implemented by the financial institution, among
                                                                            the main SRI strategies described earlier in the study. Furthermore,
 Firstly, it is assumed that ESG factors would become key components        there is also an assessment of the management processes being set
 of an investor’s investment strategy if that same investor is aware of     up along these strategies, so as to ensure their right implementation
 the importance of integrating ESG considerations at the top level of       and follow-up (specific trainings, specialised risk assessments,
 its own organisation.                                                      consultation of stakeholders, etc.)

 As such, the first criterion under review “Integration of ESG issues       Results:
 into Corporate Governance” assesses the extent to which the investor       Finally, the last section addresses what is considered as the results
 has integrated ESG into its Corporate Governance structure. In every       of the implementation of the policy and measures. Firstly, the
 organisation, the main decision-making mechanism is the board of           investor’s share of SRI assets normalized to its total assets under
 directors. Therefore, a focus has been made on how the board is            management is being assessed. Secondly, there is a review of all
 being empowered by the organisation itself to acquire the knowledge        potential controversies that may have been identified against the
 on ESG topics that it would need, so as to make the right decisions        financial institution over the past years and that would be linked to
 as regards the long-term ESG strategy to adopt for the organisation.       the organisation investing in activities or businesses that would be
                                                                            deemed as non-sustainable and non-responsible. The controversies
 Furthermore, by addressing their environmental, social and                 are identified as such according to specialised stakeholders.
 governance issues, investors can better mitigate the related risks. As
 such, these ESG factors represent possible risks for the organisation      The analysis of all these aspects results of a global score on
 if not properly managed, and thus need to be covered in the                Sustainable and Responsible Investment.
 organisation’s internal control system so as to be systematically
 reviewed along other risks, namely financial, legal and operational        The research for this study has been conducted by Vigeo Eiris, in the
 ones.                                                                      framework of the ALAS20 initiative. The information collection and
                                                                            performance assessments of all 47 financial institutions were done
 The second criterion under review, “Integration of ESG aspects in          over a period running from April 2016 to September 2016.
 investment activities” focuses on the financial institution’s investment
 strategy and practices and how ESG factors have been integrated            The information analysed in order to realize these assessments
 into them. The investor’s investment strategy is being looked at           was gathered on the investor’s websites and came from direct
 through three complementary angles:                                        communication with them through questionnaires and customized
                                                                            solicitations. Relevant stakeholders’ websites such as the UN PRI,
 •    Leadership: the existence, comprehensiveness and ownership of         Don’t bank on the bomb, Global Witness and BankTrack were also
      a sustainable and responsible investment policy;                      consulted.
 •    Implementation: the responsible investment practices and
      strategies being concretely implemented by the organisation at
      operational level;

18 | ESG Series: Responsible Investment: 2017 Annual Study
RATED INVESTORS

      BRAZIL                       CHILE                     COLOMBIA                      MEXICO                              PERU

        BB DTVM                    AMERIS AGF                ALIANZA FIDUCIARIA           BANAMEX AFORE                        AFP HABITAT

      BRADESCO AM                  BCI AM AGF                BOGOTA FIDUCIARIA        BBVA BANCOMER GESTION                      ANDINO

       INFRAPREV                  CHL CAPITALS                   COLFONDOS          MONEX OPERADORA DE FONDOS                COMPASS GROUP

        ITAU AM               COMPASS GROUP CHILE           COLPATRIA FIDUCIARIA    NAFINSA OPERADORA DE FONDOS             CREDICORP CAPITAL

 MONGERAL AEGON SEGUROS           EPG PARTNERS             FIDUCIARIA BANCOLOMBIA          SCOTIA FONDOS                      FONDOS SURA

         PREVI                    IM TRUST AGF               FIDUCIARIA COLMENA             SURA AFORE                         INTEGRA AFP

     REAL GRANDEZA                ITAU CHILE AGF            FIDUCIARIA DAVIVIENDA                                             LARRAINVIAL

  SANTANDER BRASIL AM            LARRAINVIAL AGF                 FIDUCOLDEX                                                  SCOTIA FONDOS

                                  PRINCIPAL AGF               HELM FIDUCIARIA

                                   PROVIDA AFP                  OLDMUTUAL

                          SANTANDER ASSET MANAGEMENT AGF         PORVENIR

                                  SECURITY AGF                  PROTECCION

                                                                FIDUAGRARIA

                                                                                              ESG Series: Responsible Investment: 2017 Annual Study | 19
RESPONSIBLE
 INVESTMENT:
 Ranking of Latin American
 Investors Performance 2017
  RANKING TOP 15

 SYMBOLOGY:
    BRAZIL        COLOMBIA          PERU
    CHILE         MEXICO

   #1 BRADESCO AM
   #2 ITAU AM
   #2 FONDOS SURA
   #2 INTEGRA AFP
   #3 PROTECCION
   #4 OLDMUTUAL
   #5 SANTANDER BRASIL AM
   #6 PREVI
   #7 ANDINO
   #8 REAL GRANDEZA
   #8 ITAU CHILE AGF
   #9 INFRAPREV
   #10 AMERIS AGF
   #11 BB DTVM
   #12 COLFONDOS
   #12 PORVENIR
   #13 BBVA BANCOMER GESTION
   #14 SANTANDER ASSET MANAGEMENT AGF
   #15 ALIANZA FIDUCIARIA

20 | ESG Series: Responsible Investment: 2017 Annual Study
BRAZIL PROFILE                                                                                                  AVERAGE SCORES
        Investors’ Performance
                                                                                                                 BRAZIL       31,1

                                             AM

                                                                      S
                                                                    RO
                                                                                                                   PERU       19,1

                                          IL

                                                                  GU
                                       AS

                                       ZA

                                                                SE
                                     BR
           AM

                                                                ON
                                    DE

                                                              EG
                                   V
                                  R

                                 AN
                                                                                                              COLOMBIA        18
        CO

                                RE
                                DE

                                                            LA
                               VM
                              GR
                AM
      ES

                             AN

                                                          RA
                              AP
                              I

                            DT
                            EV

                                                        GE
    AD

                           NT

                           AL

                           FR
             AU

                                                      ON
                        PR
                                                                                                                              12,9
 BR

                        BB
                        SA

                        RE
                                                                                                                   CHILE

                        IN
           IT

                        M
                     #4

                     #6
        #2

                     #8
                  #3

                     #7
#1

                     #5
                                                                                                                 MEXICO       9,2

      SCORE:           ADVANCED: 100 TO 60 POINTS |      ROBUST: 59 TO 50 POINTS |        LIMITED: 49 TO 30 POINTS |        WEAK: 29 TO 0 POINTS

All 8 Brazilian investors under review in this study, except one of them, display relatively similar practices when it comes to integrating
ESG aspects in their investments activities. This is mostly a consequence of them being signatories of the PRI and as such having duties
of reporting and disclosure of information.

Best performing investors in the country
     Bradesco AM: 47/100
     Bradesco AM performs better than its peers when it comes to the integration of ESG aspects into its Corporate Governance structure, notably due
     to the existence of a Sustainability Committee made of non-executive directors of the Board. It comes in addition to advanced practices in terms of
     responsible investing strategy.

     Itaú AM: 43/100
     Itaú AM is the Brazilian investor having the widest range of strategies and tools in place in terms of responsible investment, such as negative and
     positive screenings, engagement with companies and voting policies covering ESG factors.  desco AM: 47/100

Common SRI practices and strategies                                                  Main areas of improvement
Most of the investors have a policy on responsible investment.                       None of the investors reports on regular training sessions for its
                                                                                     board members, and when conducted, training programmes do not
Most of them are using positive screening in investments in the                      appear to cover ESG topics.
form of a best-in-class approach, and eventually combine it with
a strategy of negative screening, excluding companies from their                     None of the investors under study disclose the exact percentage
portfolio of investment due to their involvement in some activities.                 that sustainable investment assets represent on total assets under
                                                                                     management.
These practices result of risk assessments of companies and
sectors of activities conducted on ESG aspects.                                      None of the Brazilian institutions under study appear to consult
                                                                                     stakeholders on their responsible investment policy or related
                                                                                     investment practices.

                                                                                                          ESG Series: Responsible Investment: 2017 Annual Study | 21
PERU PROFILE                                                                                                    AVERAGE SCORES
              Investors’ Performance
                                                                                                                       BRAZIL      31,1

                                                                                                                          PERU     19,1

                              AL
                       NV PIT
             LA OR UP
                            A
        #4 DIC RO

                            L
                          OS
                           P

                RR P C
                   GR A

                         IA
                        AF

                  IA T

                         G
                        R

                       ND
                        A
                      SU

             CR SS
            SC BIT
                                                                                                                    COLOMBIA       18
                      A

                    FO

                    AI
        #4 PA
                    O
         #1 OS

        #3 HA
                 IN

                M
               TE

                E
              ND

              OT
             ND

              P

             CO
                                                                                                                                   12,9
            IN

                                                                                                                         CHILE
           AF
           FO

          3A

        #4
       ##2

       #3
     #1

                                                                                                                       MEXICO      9,2

            SCORE:       ADVANCED: 100 TO 60 POINTS |              ROBUST: 59 TO 50 POINTS |    LIMITED: 49 TO 30 POINTS |        WEAK: 29 TO 0 POINTS

       Out of the 8 Peruvian financial institutions being part of this study, only 3 entities stand out from the rest. Although never displaying a
       comprehensive strategy in terms of responsible investment, they report on some efforts to address this raising issue, while the other
       entities remain silent on the topic. Of note, no Peruvian investor is a signatory of the PRI.

       Best performing investors in the country
          Fondos Sura: 43/100
          AFP Integra: 43/100
          Both companies belong to Grupo Sura, a Colombian multinational holding company, whose main activities are investment banking, asset management,
          and insurance services. As such, both companies under review are to follow the Responsible Investment Policy set by the matrix company.

          Both Fondos Sura and AFP Integra look at “good corporate governance” criteria when deciding on whether to invest in companies or not. Furthermore,
          they report that potential controversies they may identify against investees and that would be related to ESG issues may impact their investment
          decision.

       Common SRI practices and strategies                                                Main areas of improvement

       A majority of Peruvian investors, report that members of their                     None of the Peruvian financial institutions under study discloses
       respective board receive training at least when joining the board,                 information regarding whether ESG issues of relevance are discussed
       while Andino is the only institution stating that training to Directors            at board level.
       also covers ESG issues (money laundering and customers issues).
                                                                                          Most of the investors do not report on whether they integrate ESG
       All financial institutions describe their internal control systems and             considerations in their investment decision making process.
       the legal, financial and operational risks covered by it.
                                                                                          The three organizations providing some information on the matter
                                                                                          report on negative screening strategies and some dedicated training
                                                                                          on responsible investment for analysts, as well as some kind of risk
                                                                                          management, but do not provide further details.

22 | ESG Series: Responsible Investment: 2017 Annual Study
COLOMBIA PROFILE                                                                                                 AVERAGE SCORES
       Investors’ Performance
                                                                                                                 BRAZIL       31,1
                                                                                                                   PERU       19,1

                                 A

                                IA
                                A
                               IA
                              IA

                             ND

                            MB
                            EN
                              A

                 IA IAR
                          AR

                           RI
                           IE

    HE LD OLO
                        LM

                        IA
                        IV

                         A

             AR UC
                        CI

                      CI

                     AR
                       V

                     CO

 #8 UC ANC
                    DU

                      A

                    ID
                   DA
                                                                                                                              18

                  DU
                                                                                                              COLOMBIA
                 ON

                  RI
                    L

        LM EX

                  CI
                   S

       DU A F
                 FI
                UA

                 B
               DO

                IA
                IR

                FI

              RA

              DU
               CI

              IA
               A

              RI
            AR
            UT

            EN

            TA
           ON
            EC

 #8 CIAR
           NZ

            FI
           AG

            O
          AT

           CI
          CI
         DM

         RV

         GO
         OT

        LF

        DU
        IA

        LP
      DU

        U

       D
     BO
     PO
    PR

     OL

     CO

     AL

    FID
    CO
     FI
                                                                                                                              12,9

     FI
    FI
                                                                                                                   CHILE

    FI

 #6

 #6
 #2

 #3
 #3

 #4

 #5
#1

 #7

 #8
 #7
                                                                                                                 MEXICO       9,2

     SCORE:       ADVANCED: 100 TO 60 POINTS |          ROBUST: 59 TO 50 POINTS |         LIMITED: 49 TO 30 POINTS |        WEAK: 29 TO 0 POINTS

The 13 Colombian investors being assessed in this study display diverse performances, and specifically when it comes to the integration
of ESG topics into corporate governance. On the other hand, they tend to uniformly disclose very little information on their investment
strategy and whether it takes ESG factors into account. None of the Colombian financial institutions covered is a signatory of the PRI.

Best performing investors in the country
     Protección: 41/100
     Protección has established a Social Responsibility Committee at Board-level, which includes non-executive directors.
     The investor excludes companies engaged in pornography and armament from its portfolio of investment.

     Old Mutual: 40/100
     The investor has set a specific committee, pertaining to the investment area within the group, in charge of the policy on responsible investment.
     The financial institution conducts risk assessment of companies on ESG aspects by sending questionnaires to potential issuers.
     Old Mutual reports that ESG assessments are being conducted on investees for 70% of funds under management.

Common SRI practices and strategies                                                  Main areas of improvement
All of the Colombian financial institutions under study have an
                                                                                     None of the investors under study reports on training being offered
internal control system covering legal, financial and operational
risks, and a majority of them have also systems covering some ESG                    to board members on a regular basis. They do not mention either
issues, such as money laundering.                                                    whether ESG issues may be covered in training sessions.

A majority of the investors have implemented training for their                      Except for three investors, none other appears to have establish
board of directors when they first join the board.                                   a responsible investment policy, or commits to taking ESG factors
                                                                                     into consideration in its investment decision making process.

                                                                                     None, apart from two financial institutions, reports on specific
                                                                                     means or management processes to integrate ESG criteria in their
                                                                                     investing activities.

                                                                                     None of the investors under study disclose the exact percentage
                                                                                     that sustainable investment assets represent on total assets under
                                                                                     management.

                                                                                                          ESG Series: Responsible Investment: 2017 Annual Study | 23
CHILE PROFILE                                                                                                   AVERAGE SCORES
                Investors’ Performance
                                                                                                                          BRAZIL      31,1
                                                                                                                            PERU      19,1

                                                   E
                                                 IL
                        #6 RRA AG CH

                                        AG F
                                               F
                                                                                                                       COLOMBIA       18

                                    TY AG

                                            RS
                                            AG

                           LA US OUP
                                             F
                   F

                                 PA ALS
                                            F
                                         AG

                           SE IN F
                                           L
                 AG

                                         NE
                                          P
                                          R

                              CU VIA
                                         F

                        #6 TR GR
                                       AF
                                      DE

                        #6 MP GF

                                        T
                                      AG

                                     RT
                                     AL
                E

                             EP PI
                                      T
                IL

                           IM ASS
                                    A

                                    A
                                  AN

                                    P

                         # 7 L CA
                     IS
            CH

                                 ID

                                 RI
                                 CI

                                 M
                                                                                                                                      12,9
                   ER

                               NT                                                                                           CHILE

                              OV

                        #6 I A
                              IN

                               G
          AU

                             CH
                 AM

                            SA

                           PR

                           PR

                           BC
                           CO
        IT

                         #7
                        #4

                        #6
                #2

                        #5
                       #3
      #1

                                                                                                                          MEXICO      9,2

            SCORE:        ADVANCED: 100 TO 60 POINTS |         ROBUST: 59 TO 50 POINTS |          LIMITED: 49 TO 30 POINTS |         WEAK: 29 TO 0 POINTS

       The Chilean investors, of which there are 12 in the study, are homogeneously reporting little information on their strategy to integrate
       ESG factors in their investment decision making process. Only Itaú disclosed publicly that ESG factors were considered as being an
       integrated component of its investment activities. None of these financial institutions is a signatory of the PRI.

       Best performing investors in the country
          Itaú Chile AGF: 31/100
          Itaú Chile AGF is part of Itaú Corpbanca, formerly known as Banco Itaú Chile, and subsidiary of Itaú Asset Management Brazil. As such, Itaú Chile AGF
          adheres to the commitments of its controlling entity in terms of responsible investment, which is a signatory of the PRI.
          Itaú Chile AGF conducts ESG risk assessment of companies it invests in and states to have covered 31.3% of IPSA in Chile and 24.91% of the Merval
          Index in Argentina with such ESG risk assessment.

         Ameris AGF: 26/100
          The asset manager reports to have a social impact fund, responding to the needs of social institutions for specific financial solutions.
          The board of directors of Ameris is in charge of assessing which social funds can be developed and launched by the asset manager.
          Significant tools implemented for the investors to keep track of both the financial and the ESG performances.

       Common SRI practices and strategies                                                  Main areas of improvement
                                                                                            Except for three investors, none other mentions the existence of an
       Most of the Chilean financial institutions under study have an                       investment policy stating that ESG factors should be integrated in
       internal control system covering legal, financial and operational                    investing activities.
       risks.
                                                                                            None of the Chilean investors appear to have implemented
                                                                                            the following strategies of investment integrating ESG factors:
       Few means are being reported by local investors to ensure that                       exclusionary screening, engagement with companies or
       ESG factors would be taken into consideration in their investment                    consultation of stakeholders.
       decision making. Four of them report on responsible investment-
                                                                                            None of the investors under study disclose the exact percentage
       related training being provided to analysts and asset managers.                      that sustainable investment assets represent on total assets under
       The same investors state that company’s risk assessments on ESG                      management.
       issues are being conducted.
                                                                                            Few of the investors under study reports on offering training to
                                                                                            board members.

24 | ESG Series: Responsible Investment: 2017 Annual Study
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